ITC Q1 results preview: ITC Ltd is expected to report a weak performance for the April-June quarter (Q1 FY27), with analysts forecasting pressure on earnings due to weakness in its cigarette and agri businesses. While the FMCG segment is likely to sustain double-digit growth, steep tax hikes on cigarettes and continued softness in the agri business are expected to drag the company’s overall performance.
The Kolkata-based company, in an exchange filing, said its Board of Directors will meet on July 31 (Friday) to consider and approve the financial results for the first quarter of FY27.
Key monitorables include the rural versus urban demand outlook, competitive intensity, raw material trends, the agri business outlook and the performance of the cigarette business.
Profit, revenue and EBITDA expectations
Brokerages expect ITC to report a decline in profitability, although estimates vary.
Motilal Oswal Financial Services (MOFSL) expects consolidated net sales to rise 2% to ₹21,900 crore. It estimates EBITDA to decline 12.8% YoY to ₹5,940 crore, with the EBITDA margin at 27.1%. Consolidated PAT is projected to fall 12% YoY to ₹4,620 crore.
Emkay Research expects revenue to decline 1% to ₹19,749.9 crore. It has projected EBITDA at ₹6,261.3 crore, down 12%, with the EBITDA margin contracting 350 bps to 31.7%. PAT is estimated to decline 11% to ₹4,912 crore.
Axis Direct has the most conservative estimates, projecting revenue to decline 10.2% YoY to ₹17,597 crore. The brokerage expects EBITDA to fall 12.7% to ₹5,468 crore, while the EBITDA margin may contract 87 bps to 31.1%. PAT is pegged at ₹4,272 crore, down 13% YoY.
Cigarette business
Brokerages unanimously expect the cigarette business to remain under pressure due to higher taxation.
Motilal Oswal Financial Services expects cigarette revenue to decline 18% YoY, while volume may fall 11% YoY in Q1 as higher taxes weigh on demand. The brokerage also projects cigarette EBIT to decline 25% YoY, with margins compressing significantly as price hikes remain insufficient to offset the tax impact.
Emkay Research also expects weakness in the segment, forecasting a 10% YoY decline in cigarette volumes and a 20% drop in cigarette EBIT, attributing the weakness to the sharp increase in taxes.
Axis Direct expects the cumulative ~45% increase in cigarette taxes to weigh heavily on performance. According to the brokerage, ITC has shifted from fully passing on higher taxes through prices to calibrated price increases to protect its legal franchise and limit downtrading to illicit products. It added that the staggered price hikes remain inadequate to fully offset the pressure on margins.
FMCG business
Brokerages expect the FMCG business to remain a bright spot.
Motilal Oswal Financial Services expects FMCG revenue to grow 15%, while EBIT is projected to increase 30%, supported by a 90 bps margin expansion.
Emkay Research expects the other FMCG business to report around 12% revenue growth YoY, with EBITDA margin expansion of nearly 60 bps YoY on a benign base.
Systematix Research expects the FMCG business to grow 12% YoY, though it also expects input cost inflation to pressure margins. Axis Direct projects the FMCG business to post 12% YoY growth.
Agri, paper and packaging business
Brokerages have mixed expectations for ITC’s non-cigarette businesses.
Motilal Oswal Financial Services expects agri business revenue to increase 11%, while paper business revenue is projected to grow 7%.
Emkay Research, however, expects the agri business revenue to decline 10% YoY, while the Paperboards and Packaging segment is likely to report around 10% revenue growth YoY.
Axis Direct forecasts the Agri business to decline 2% YoY, citing shipping disruptions and policy-related headwinds, while the Paperboards, Paper & Packaging segment is expected to grow 6% YoY.
Stock performance
The stock fell as much as 1.5% to its day’s low of ₹281.10 per share on BSE ahead of its June quarter earnings. It has lost 10% in 3 months, 12% in 6 months and 31% in the last 1 year. The scrip had hit its 52-week high of ₹426.50 in October 2025 and its 52-week low of ₹275 in June 2026.
Disclaimer: The views and recommendations made above are those of individual analysts or broking companies, and not of Mint. We advise investors to check with certified experts before making any investment decisions.
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